Trish Gastineau, CTC, remembers well the day in the mid-1990s when the agents at her former travel agency were told they had to start charging service fees. “We were just trembling. We were terrified,” recalls Gastineau, who today is owner of Simply Europe Travel, a Virtuoso agency in Montgomery, Ala.
Fast forward 20 years and fees are still a hot button topic, one that can inspire fear in the uninitiated. “Fees are really scary to a lot of people. We as an industry have a hang-up about service fees and professional fees,” says Gastineau, who is an occasional speaker on the topic.
Travel Market Report asked Gastineau to share her views and advice on fees.
Why should agents charge for their services?
Gastineau: First of all, if we are going to be professionals and not hobbyists we need to run our business as a business. This is not you trying to be greedy. This is about you trying to run a profitable business.
You will take yourself and your business so much more seriously if you’re charging a service fee. It’s going to help you pay more attention to your numbers.
I was astounded by the amount of profit it added to my bottom line. Having the positive cash flow helped me reinvest in my business. And it made paying the monthly bills easier.
Finally they need to be charging because they really are worth it.
How did you set your prices when you started charging fees?
Gastineau: I always had a commission number in my brain and said that if I made XYZ in commissions on a total package then that was a good sell for me. So that went into how long does it take me to do an FIT, and if they walked away [without booking] would I make that number I had in my head? I used that as part of my indicator of what I was going to charge.
What are your fees today?
Gastineau: For air tickets, I charge $150 for international and $75 for domestic. If I’m doing something else in conjunction, I give a little bit of a discount. For customized FITs, my planning fee starts at $250 per person for trips up to 14 days. For 14 to 21 days, I add an additional $250 total, not per person. I charge a $75 per person professional consulting fee to manage cruises and escorted tours.
What percentage of your revenues do fees bring in?
How do you talk to first-time customers about fees?
Gastineau: Before I work with a client, I do a complimentary 30-minute consultation. Then, if I feel like it’s going to be a win-win for us to work together, I’ll say, ‘Let me tell you about the way I work.’ I tell them some of the things I’ll be doing for them. Then I say, ‘If you’d like to move forward, I will take a professional consulting fee of . . . ’ And then I give them the price.
The fee is based on what they’re looking for, and I adjust it as needed. If it’s something that’s not going to cause a lot of research or work, then maybe it’s on the lower end.
What about current clients? How should agents introduce fees to them?
Gastineau: Prepare them. Send a letter saying: ‘Starting this date we’re going to begin charging XYZ.’ Then tell them, ‘Because you’ve been such a great client, on your next trip we’re going to waive the fee.’
You can start putting the fee on your invoices now, and mark it ‘service fee waived’ to get them used to seeing it.
What does it take to be successful charging fees?
Gastineau: The people that are most successful implementing fees are the people that have a mindset shift about it. They value their time. They know they’re worth it.
They’re’ confident in what they bring to the table. And they’re okay if someone says, ‘No thank you, that’s not for me.’
You will lose some sales if you have a service fee. But that’s okay because that’s weeding out clients that are not your ideal clients.
How do you feel about plan-to-go fees?
Gastineau: I’m not a fan. People will tell clients, ‘We have a plan-to-go fee, and it’s $150 per person, but don’t worry because if you go, it goes toward the balance of your trip, but if you don’t go then it’s nonrefundable and we’re keeping it.’ That is not a fee. That is a deposit.
You’re going through all that emotional anguish to get the fee, but then you don’t get anything from it if they take the trip. So go that extra step and keep it. You deserve it.